It May be Time to File For Bankruptcy When…..

Let’s face it. Most people do not WANT to file for bankruptcy protection. At some point during every consultation, I’m asked: “Should I file for bankruptcy?” “What would you do if you were me?” “What would you tell me if you were my sister?” And sometimes I even hear: “Please tell me what to do!” While I am not able to tell clients to file for bankruptcy, I can certainly give some food for thought. And here it is:Generally, everyone knows many of the reasons why people may need to file for bankruptcy protection. In fact, most everyone knows the benefits of filing for bankruptcy. What regularly seems to escape most are the signs that it may be time to actually take that initial step towards financial relief. In fact, rather than file for bankruptcy protection early and reap all available benefits of bankruptcy, people regularly, bury their head in the sand, pray on it and/or simply do nothing out of fear, shame, rumor, guilt and/or lack of information. Over the last 21 years, I have seen this type of behavior regularly lead to the loss of everything, from all financial assets, retirement funds, homes, cars, relationships and yes, even good mental health and sleep. Typically, it’s not until one hits absolute rock bottom before they are able to, in fact, forced to seek the help that is so desperately needed. And by that point, most of the “front end” benefits have already been lost. This leaves clients with the task of rebuilding their personal and financial lives, literally from the ground up. Problem? At the age of most of my clients, there is little to no real time to recover from such a loss. Of course, filing for bankruptcy sooner rather than later, most often, works to save most if not all of your precious assets, while simultaneously providing financial relief from existing debt. A far better proposition to start earlier rather than later!In an effort to help put things into perspective, here are some common indicators that it may be time to file for bankruptcy protection. If some or all of the following indicators sound familiar, it may be time to give bankruptcy some serious consideration. In other words, it may be time to file bankruptcy when…..1. You are facing foreclosure, car repossession and/or wage or bank garnishment.2. You have “maxed out” all available home equity and consumer lines of credit and overdraft protection accounts.3. You find that your 401(k) has been severely reduced or completely depleted due to withdrawals, loans and hardship requests.4. You find that all of your savings are literally gone.5. You find it necessary to increase your Federal and/or Maryland tax withholdings in an effort to increase your net take home pay, leaving you with the real possibility of a future tax liability.6. You are paying regular overdraft and late fees and have been subject to increased credit card interest rates.7. You are regularly using a variety of credit accounts to “juggle funds” or “rob Peter to pay Paul”.8. You are regularly borrowing from friends.9. You are dodging collection phone calls at home, work and on your cellular phone.10. You dread, and worse yet, do not open your daily mail.11. You are hiding information from your spouse, significant other, friends and family members.12. You are regularly stressed and suffer from a lack of sleep.13. You have considered all financial options and find that none are left.14. And finally, it may be time to consider bankruptcy, when you have to ask!Many clients quickly relate to many of these indicators and still they ask….”should I?” when they should be asking: “shouldn’t I?” Remember, it’s not a question of whether someone can file for bankruptcy, it’s just a question of which bankruptcy chapter is right for which situation. A Chapter 7 bankruptcy has the ability to wipe out all dischargeable debt. Alternatively, for those who cannot meet the criteria for a Chapter 7 bankruptcy, a chapter 13 bankruptcy can reorganize your debt and provide substantial financial relief. Common to both is the benefit of immediate stress relief! To be more specific….1. Chapter 7 bankruptcy candidates will receive complete relief and forgiveness from all dischargeable debt.2. Chapter 13 bankruptcy candidates will receive financial relief through a complete reorganization of current debt.3. Chapter 13 bankruptcy candidates face the possibility of completely stripping that burdensome second mortgage lien, saving tens of thousands of dollars.4. Chapter 13 bankruptcy candidates face the possibility of reducing their current car loan balance, down to the current fair market value, saving thousands of dollars.5. Chapter 13 candidates have the ability to repay unsecured debt for as little as 10¢ on the dollar.6. Both Chapter 7 and 13 candidates have the ability to completely surrender any and all secured debt, including cars, homes, jewelry, furniture, electronics and or timeshares.7. Both Chapter 7 and 13 candidates have the ability to reduce, erase and/or reorganize IRS and/or Maryland tax debt.8. Both Chapter 7 and 13 candidates have the ability to immediately halt foreclosure proceedings, wage and/or bank garnishments, repossessions and some eviction proceedings.9. Both Chapter 7 and 13 candidates have the ability to obtain relief from joint debt and/or co-signers who are not paying some or all of their share of the debt.10. Both Chapter 7 and 13 candidates will receive immediate stress relief through the elimination of all phone calls, letters, pending suits and other collection efforts.While these benefits are certainly available by law, the first step is to accept that you may be a candidate and, at a minimum, seek a personalized consultation. Immediately following the thought that bankruptcy may be a possibility, you will need to prepare for it. Should you wish to receive additional information about bankruptcy assistance and preparing for your consultation, call The Kelsey Law Firm at (301) 390-9060 or send an email to jjones@kelseylaw.net, with “bankruptcy information requested” in the subject line to receive a bankruptcy packet, that will include a list of commonly asked questions along with information on some of the costs involved, where to get your credit report and fair market value information for your home(s) and car(s) and much more. In addition, you will also receive a copy of, or a link to, our complete bankruptcy questionnaire, along with information on a credit counseling agency, that provides the required credit counseling course, for as little as $5.00. Of course, a 30 legal minute consultation may also be requested, which is free (for the month of January) to all those who identify themselves as a “Kelsey Law Firm blog reader”.Thanks for reading. Please note that I am licensed to practice law in Maryland and the District of Columbia. This topic was based off of Federal bankruptcy laws and the laws of the State of Maryland and the District of Columbia. Please note that every case is different and nothing herein is intended as specific legal advice. Please feel free to learn more about my practice at www.kelseylaw.net and to seek legal advice when you feel it necessary.In addition, please be sure and “like” this and any other article to promote the sharing of these important topics. Of course, I welcome you as a regular follower to my blog and you may choose to do so by clicking “follow” on this page. 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